Small company threshold to rise from ₹10 crore to ₹20 crore

The question asked the Ministry of Corporate Affairs to explain the parameters for doubling the 'Small Company' capital threshold and to detail steps taken to decriminalize corporate offences and strengthen the fast-track merger framework. The government replied by citing the need for flexibility in the economy, listing phased decriminalization acts, and outlining the expansion of merger eligibility criteria.

Asked by Shri Trivendra Singh Rawat and Dr. Sanjay Jaiswal; Answered by the Ministry of Corporate Affairs (Minister Smt. Nirmala Sitharaman).

• The paid-up share capital threshold for 'Small Companies' is proposed to increase from Rs. 10 crore to Rs. 20 crore to allow flexibility based on business growth and economic expansion.
• Decriminalization of offences under the Companies Act, 2013, was carried out in phases: 16 offences in 2019, 35 offences in 2020 (with imprisonment removed for 11), and 12 offences under the LLP Act in 2021.
• The fast-track merger (FTM) framework under Section 233 was expanded in 2021 to include start-ups, in 2024 to allow cross-border reverse flipping, and in 2025 to include unlisted companies with borrowings not exceeding Rs. 200 crores.
• Provisions exist for deemed approval under the FTM framework to ensure mergers are approved within a 60-day timeline.

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